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Mideast escalation could pose major economic risk to RI
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A missile interception system operates on April 14, 2024, after Iran launched drones and missiles at Israel, as seen from Ashkelon, Israel. The Israeli military claimed the vast majority of drones Iran had fired had been shot down. (Reuters/Amir Cohen)
F
urther escalation in the Middle East conflict could pose multi-layered economic risks to Indonesia, ranging from further capital outflows to weaker gross domestic product (GDP) growth, according to analysts and some former government officials.
Speaking at an online event held by the Eisenhower Fellowships on Monday, former Finance Minister Bambang Brodjonegoro said Indonesia’s economic growth this year could end up between 4.6 and 4.8 percent if further escalation occurred, short of the government’s target of 5.2 percent.
“Perhaps, if the escalation is more severe and longer [...] maybe the 5 percent target will be challenging,” Bambang said.
Iran launched over 200 drones and missiles in a military strike on Israel late on Saturday, AFP reported, in retaliation for an Israeli attack on an Iranian consulate building in Damascus on April 1.
The strike was the first direct attack Iran has launched on Israel in their decades of contestation.
In response, Finance Minister Sri Mulyani Indrawati held a meeting on Sunday discussing the global economic and financial situation amid the heightened geopolitical tensions.
Coordinating Economic Minister Airlangga Hartarto said in a press statement on Monday that the government would “not stand still" and emphasized that market trust in Indonesia "must be maintained". He also urged market players to "remain calm and not take speculative steps".
